05/04/2020
NATIONAL FASHION RETAILER CHAPTER 11 BANKRUPTCY FILING ALERT. On May 4, 2020, a high-profile retailer J. Crew filed for chapter 11 protection in the U.S. Bankruptcy Court for the Eastern District of Virginia. The fashion retailer opened its first store in downtown Manhattan in 1989. The company acquired the defunct Madewell brand and went public in 2006. In 2011 it started expanding internationally. In 2019, revenues from the J. Crew brand totaled approximately $1.7 billion (or 67.2% of the business’ revenue), revenues from the Madewell brand totaled approximately $602 million (or 23.7%), and an additional approximately $230 million (or 9.1%) was generated from wholesale customers and other fees. A number of affiliated entities currently operate an “integrated business” with common ownership and control under Chinos Holdings, Inc. Chinos Holdings, Inc. is among the entities that sought chapter 11 bankruptcy protection on May 4, 2020. An immediate request for consolidation of all chapter 11 cases under In re Chinos Holdings, Inc., Case No. 20-32181, has now been made. It has also been reported that the debtors filed for bankruptcy protection to implement a consensual restructuring agreement with their secured creditors, according to which approximately $2 billion in secured debts would be equitized into approximately 82% of the reorganized debtors’ equity, resulting in elimination of approximately $1.65 billion in secured debts, and a new financing of approximately $420 million would be obtained to enable the debtors to operate their business and to reorganize their financial affairs through a chapter 11 plan.
